Guernsey’s scheme is significantly less generous than similar schemes in the UK and Jersey – in both those jurisdictions, the aid is linked to a normal wage.
More than 6,000 local workers have been furloughed and payments through the scheme have reached £7m.
Jersey, which has a population with 43,000 more residents, has paid out £50m. in its furlough scheme.
In the Bailiwick furloughed workers can receive £1,192 every four weeks, whereas in the UK workers can get up to £2,500 per month from the government, with a further top-up from the employer.
Deputy Chris Green, the president of the Scrutiny Management Committee, has written to Policy & Resources to ask why the minimum wage was chosen as the yardstick, but so far he has not had a response.
He thinks the scheme is unfair, pointing out that the States has agreed on many occasions that the minimum wage is not supposed to be a living wage and the amount was set as a way to avoid the worst forms of exploitation.
‘It might arguably have been justifiable for Policy & Resources to start using the minimum wage as an initial yardstick for the co-payment scheme when the lockdown first started; but now that we know that the current situation will be subject to six distinct phases and may well last into the final quarter of the year, we feel that there does need to be both a further rationale set out for using the minimum wage metric and, secondly, there does need to be a review of it bearing in mind the minimum wage is set at a low level and is leaving many individuals and families short of cash.’
The furlough scheme is a job retention initiative, designed to protect the future of businesses and prevent mass unemployment.
Initially when it was set up employers could apply to the States for 80% of the minimum wage to pay employees and employers were required to top up the remaining 20%.
The scheme has since been altered so that businesses that are really struggling with the lockdown can apply for 100% of the minimum wage to pay their workers.
For furloughed workers living in rented accommodation, the £1,192 does not stretch far because the cheapest rents on the island start at around £800 for a studio flat, or £750 for a room in a shared house.
Along with greater clarity about the rationale for choosing the minimum wage benchmark, Deputy Green is also calling for a long-term view to be taken so that islanders have better spending power to lift the economy out of a slump.
‘I think the key point is that the financial support to individuals and businesses needs to be framed in the context of enabling a period of sustainable recovery.
‘So the focus must be on supporting a V-shaped recovery bounce. Sustainable businesses need support until they can reopen and this timing may vary.’
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